The Geology of Homeowners Insurance – Lesser-Known Exclusions

You may not have thought that you would need to understand geology prior to getting your homeowners insurance policy. But the truth is, if you live in an area that is considered slightly susceptible to natural occurrences like earthquakes, you should have at least a basic understanding of how geology works.

Understanding the geology of an area, along with how human activities can impact the soil that your home sits on can shed a lot of light on why your homeowners insurance policy doesn’t cover certain types of damage.

“All Perils” Is Not Literal

Many homeowners believe that if their policy is considered to be an ‘all perils’ one, that they will be covered for, literally, all perils. But this is not the case, even with the highest quality, most-trusted homeowners insurance companies.

Exclusions are a normal part of all homeowners insurance policies, and is the part of the policy where many homeowners find they are covered for a lot less than they thought they would be.  Many of the hazards outlines in the exclusions section or statement involve geology. Some of the more common of these exclusions are:

–          Earthquakes

–          Landslides

–          Floods

–          Hurricanes

However, there are some lesser-known exclusions which may leave a homeowner scratching their head, but that will definitely affect their coverage. And these exclusions aren’t added on a whim by insurance companies, whose agents may have gone so far as to attend geology workshops to learn more about how natural and human events can affect the stability of the soil on which residential properties sit so as to be better able to explain these exclusions to their clients.

Liquefaction

Liquefaction is what happens when the contact between soil particles is lost. This loss in contact usually occurs as the result of either vibrations or water pressure occurring within a soil mass. When a loss in contact occurs, the soil’s behavior changes from that of a solid to that of a liquid. As such, this liquefied soil cannot support any weight, and thus is capable of flowing where gentle slopes are present.

Conditions for Liquefaction and Susceptibility

Liquefaction occurs when 3 conditions are present: ground water saturation, sediment or fill that is loose and granular, and strong shaking. Areas that are susceptible to liquefaction, such as the San Francisco Bay area are mapped by geologists in order to inform homeowners and insurance companies.

Subsidence

Another exclusion from homeowners insurance policies is subsidence. Subsidence is actually a phenomenon which occurs as the result of human activity, namely underground mining. Mining opens voids in the ground, which can collapse. Collapse can occur suddenly or slowly, but one thing is true no matter the speed: subsidence can cause significant damage to any structures that exist above ground, such as buildings and roads.

Subsidence and Condemnation

Should a home be located on land that has been previously mined, and that land collapses due to subsidence, condemnation of your home can occur, even if no damage has occurred. This is because the future costs to maintain your home and other structures in the area may exceed the resources of local government.

Expansive Soils

Clay is a substance that will expand when it gets wet, but will shrink when it’s dry. And soils which contain a high amount of clay are dangerous. So dangerous, in fact, that they cause more damage to homes than tornadoes, earthquakes, floods and hurricanes combined. Called ‘expansive soils’, areas containing high amounts of clay can undergo significant changes in volume. These volume changes can result in damage to sidewalks, underground utilities and driveways, to name a few.

Unfortunately, it’s estimated that half of United States homes are built on expansive soils, and that half of these will exhibit some form of damage. And so the only recourse for homeowners is to consult a guide which illustrates the existence of expansive soils, and avoid purchasing a home which has been built on these vulnerable areas.

Citations:

Guest author Carly Jorge writes on a variety of topics, but she is particularly well-versed in the subject of homeowners insurance.  She is a frequent contributor at Homeowners Insurance Geek, a site dedicated to helping consumers undertand the industry.  You can also find .

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